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"Ever wonder if City Council is as contentious and chaotic as it is sometimes portrayed? Here you can get a progressive perspective on some of the issues from someone who spent four years in the trenches. Totally unbiased, though!Feel free to comment but keep it respectful, just like they do at council."

Wednesday, June 20, 2012

Growth projections: Fact and fantasy

One thing that the current Planning Committee, make that the
Planning and Environment Committee, can’t be accused of is excessive
realism. This is particularly apparent when matters of growth come before it.

That was the case last Monday when the director of land use
planning, John Fleming, presented a report on the growth projections for the
city of London for the next 30 years.

The planning department had retained Altus Economic
Consulting to do the research. It’s a well respected firm of “urban and real
estate economists that provides strategic advice and information to the private
and public sector clients in Canada.” Formerly known as Clayton Research
Associates, the company has a long history of studying the London area and is
therefore very conversant with the region. In fact, it provided the background information
of projected growth to the previous council when it was preparing its revisions
to the Official Plan. Additionally, it provided forecasts for the 2009 Development Charges Study and the Growth Management Implementation Strategy.

Basically, Altus looks at the current and unfolding international,
national and local economic conditions, population trends, housing demand
indicators, and requirements for non-residential space. It also provides its
own version of best and worst case scenarios and takes into account the
potential effects of local initiatives that could serve to stimulate or discourage
growth.

On Monday, Fleming was charged with the responsibility of
presenting the committee with its draft report and his department had prepared an
overview. It’s clear that they were aware that the committee might not be too
receptive to the contents. They felt it incumbent on themselves to point out that there is a
difference between fact and fantasy in a section called Growth Forecasts vs
Growth Targets.

It is important to recognize the difference between growth forecasts
and growth targets. Growth targets are aspirational goals of desired rates of
growth. They provide motivating outcomes for initiatives to stimulate the economy
and to attract population. However, growth forecasts are based on an informed
estimate of the future…. Forecasts provide a baseline for anticipated growth
and can inform growth targets.

In short, there is hope and there is reality, and it is
important to distinguish between them, particularly since the numbers being
projected will be used to make serious decisions about spending on
infrastructure and finding ways to pay for those decisions. Get it wrong, and
there are significant consequences for residents and their children and grandchildren.

Staff might as well have saved breath and ink on the report.
It was obvious that most of the committee members had not read it and when informed of its contents,
didn’t believe it. It didn’t match their fantasies of 2.5% assessment growth
per year and 10,000 net new jobs over the next few years.

Basically, the message from Altus was that assessment and
population growth over the next thirty years, and particularly for the next five
years, will be modest and lag behind that of the country and the province
generally. With respect to population, a growth rate of less than 1 per cent is
projected, in line with what has been experienced for the last decade, although
a scenario with a higher growth rate of 1.5 per cent (as well as a lower than
anticipated growth rate of .73 per cent) is also presented. Just in case.

It’s not what the committee wanted to hear. How could .93
per cent population growth turn into 2.5 per cent assessment growth? You get
assessment growth from more people forming more households and buying more
houses. Without the people, where will the assessment growth come from? And
without more assessment growth, how do you pay for existing services while
maintaining a tax freeze?

But Fleming was clear on the need for the committee to
understand what the projections were. They weren’t his projections; they came
from an independent, objective, professional firm. The information provided
was critical. If you have limited assessment and population growth, you had
better make the most of what you have, build where the services are already in
the ground and where you don't have to spend a lot of extra money for police,
fire, and other basic services. Focus on infill rather than greenfield development.

Judy Bryant is the only committee member who seemed to have
read and understood the implications of the report. "It seems that assessment
growth won’t be fantastic over the next few years, we don’t have a magic wand,”
she noted. They would have to be mindful of this when doing “planning on the
fly”, as this committee has been wont to do. “We have to build where it is most
economical, keep the numbers in mind over the next two and a half years.”

Her remarks were not appreciated by Mayor Fontana. To his
mind, the report was too pessimistic.

Apparently, he was speaking for others as well as he
continued in the first person plural. “We don’t like what we see,” he
complained. “That’s why some of us are here; we don’t want to accept what is
happening.”

He certainly didn’t like the numbers. “These are the same
numbers as the past five years; those ‘informed’ numbers say the city is going
to crawl along, what I disagree with totally.” They had new targets, he pointed out. They had
adopted a growth rate of 2.5 per cent and wouldn’t accept growth of one per
cent. “See what we need to change to change those numbers, those projections
are not acceptable.

“That’s not to be argumentative,” he concluded, “but that’s
facts.” It was an unusual definition of facts.

Paul Hubert is not on the committee, but he was interested
in the issue and he had, in fact, read the report. Although he sympathized with
the mayor’s objections, he pointed out that one can “Promise little and deliver
much or promise a lot and deliver little.” The latter is disastrous, he warned.
It was better to have big aspirations and
prudence.

Also in attendance was Joni Baechler. She too is not on the
committee but seems to be spending many hours keeping tabs on what is happening
on other committees. She pointed out that the report is a “fact based document
that feeds into our development charges. We can’t inflate the number” since to
do so would potentially inflate capital projects, and destroy the critical balance.
“If you charge too much or too little, it falls back on the taxpayer.”

Fleming agreed. Of course they wanted higher growth rate;
the council had identified lots of projects and initiatives it wanted to
implement. But the report is the basis for the Official Plan review; it has to
be fact-based. It had been prepared by one of the most well respected economic
forecasters in Canada. He stressed the distinction between growth forecasts and
aspirations. There was plenty of room to respond if growth proved to be faster
than projected. “This is the basis for land requirements, for [development
charges]. These are fact based numbers with flexibility.”

Joe Swan didn’t like it either. He saw the projections as “a
baseline for a status quo world” without intervention. “How aware is Althouse
of target-based intervention?” he wanted to know. Clearly, he hadn’t read the
report; he didn’t even know the name of the consultant although it had been
repeated several times. He seemed to think that this foundational report should
be more of a marketing exercise. “It sends a message to the investors that
nothing is going to happen in London,” he complained. “We’re anticipating
higher numbers.” He was annoyed that “Althouse thinks it’s right and everyone
else is flaky.”

Dale Henderson too was not happy with what he saw. He didn’t
see any measurement documentation. He wanted that every month, how many new
jobs, how many new homes to show how they were doing. “I don’t know what this
means against any policy,” he sputtered.

Fleming wasn’t sure what Henderson was referring to. The report
was full of measurements—numbers, rates, charts, tables and graphs. As well,
the committee received monthly updates on real estate sales and building
permits. They had planning applications on which they made decisions every
meeting. He heard loud and clear that the committee wanted to grow at a faster
rate. But this was a forecast, not a policy document. It was to be circulated
to the public and stakeholders for feedback.

Still, Fontana wanted changes before it went out for comment.
He wanted more discussion of the committee’s aspirations at the front end. “Better
ratchet it up; otherwise what we’re doing is not worth it.” As for the
fact-based nature of the Altus draft report, “They never talked to me,” he
pointed out, affronted.

“We’re trying to move the numbers. I thought we already made
the decision as a council that we want 2.5%,” he reiterated. “We’ve told the
world that’s where we want to go. Sorry to be so nauseating.” Somehow his “sorry”
sounded less than sincere.

Bud Polhill chairs the committee and tends to reserve his
remarks for the end. He didn’t like the message that the report might send to
anyone who might want to come to London. He likened it to a weather report. If
the weather sounded bad, no one would come. “It’s like the wind direction,” he
said, and he wanted to change the direction of the wind.

Good luck with that, Bud. Just be careful of what you’re doing
in the wind.

Swan had the last word. Despite probably not having read it,
he had a special interest in the report since he saw it a challenge to his committee,
the Investment and Economic Prosperity Committee. If they couldn’t “move the numbers”
they might as well give up. He asked for the “intervention” to be added to the
report, something along the line of: Do
nothing, this is what you get; attract investors, and see what happens, etc.

With that wishful thinking added, they moved to receive the
report. All supported the motion save Henderson. He still wanted no part of it.

Perhaps he’ll reconsider when he’s had a chance to actually read it,
measurables and all.

10 comments:

Kathy Clee
said...

The committee asks for an independent report based on research, many members appear to fail to read it, and yet get all bent out of shape when they get a conclusion they don't like. How can John Fleming and the other city staff work with such low-calibre thinkers without becoming contemptuous of council?

It is like most people cheering for the Toronto Maple Leafs to win the Stanley Cup. It is a great sentiment, but history and the methods of the hockey team's management are not up to the task. I say make sure our city can do what it needs to with the tax revenue it now has. You can't build while looking for new customers.

This committee of council is an embarrassment. I feel very sorry for John Fleming and his staff. 2014 must seem like an eternity to them, and I hope we don't lose more good people to other municipalities where the collective political IQ has got to be higher.

Growth is dependant upon London's population growth. The past is a good predictor of the future. Our 2011 population of 366,151 grew 3.9% over our 2006 population of 352,395. A growth of less than 1% a year.

London's 2011 population is ranked Nationally 15th and Provincially in size at 6th largest city in Ontario.

London's business growth has seen advances in Education and Health Care. Manufacturing took hits with the closure of Ford Talbotville and Electro Motive - just to name 2 large employers that closed their doors recently.

Lining our streets with strip plazas will not see London grow. Especially when there are so many commercial property vacancies.

In a world that is seeing "negative growth", we need to have our City Plan be realistically advanced. Quality planning over quantitative plundering! Leadership in responsible, visionary government is required.

Don't hold your breath for Dale Henderson to read the report. Many of us Ward 9 residents already wear paper bags over our heads in shame over our Councillor. Maybe if we find him a nice quiet spot at the base of Reservoir Hill to read...oh wait....he took care of that.

That committee, like Council is about 50% incompetent and 30% corrupt. You do the math.

As a general comment, isn't it sad that population growth is still a necessity for economic ((or general) prosperity? Not desirable. Not sustainable. There HAS to be a better way.

Which company has not come to London because the growth rate was too low? We have a collective IQ on that committee of less than the forecasted or the aspirational growth rate. I do hope the voters in ward 9 and across the city wish they had a do over.

I can't believe all the Eyeore style comments condemning our Mayor. Yes traditional economic modelling does lead to a low population growth scenario. But nowhere in the so-called "expert" report do they factor in the demographic growth that will occur when people and businesses hear the tune "London is the City of Opportunity." Frankly 4.0% is pessimistic.